Posts

FIC Compliance Notice for Estate Agency Firms

/0 Comments/in /by

Recently, the Financial Intelligence Centre (FIC) issued a notice to all estate agency firms, instructing them to complete and submit their Risk & Compliance returns by the 31st of May 2023.

All firms, branches, and franchises that have been issued a goAML Org ID number by the FIC, which serves as your FIC registration number, are required to submit these returns. This FIC registration number is essential for estate agency firms, branches, and franchises to register with the PPRA and obtain a Fidelity Fund Certificate (FFC).

The required document is known as Directive 6 of 2023. Firms registered from the 1st of April 2022 to the 31st of March 2023 are obligated to complete this directive. The link to this document was emailed to all estate agency firms last year and can be accessed through the provided link.

The urgency of submitting this form stems from the South African government’s efforts to remove the country from the Financial Action Task Force (FATF) grey list. South Africa was grey-listed in February 2023.

For South Africa to exit the FATF grey list, the FIC must ensure that its administration is current.

It is important to note that the majority of estate agency firms have neglected the request to complete this document.

Firms that continue to disregard this directive will be marked as non-compliant. It is highly likely that the FIC will share this information with the PPRA, which will then be compelled to prevent your agency from operating until Directive 6 has been submitted.

Directive 6 must be completed online using the following link.

For any queries, please contact the FIC’s compliance centre on 012 641 6000 or email [email protected]. For further information, visit www.fic.gov.za.

The Path to Certification: REIS Panel Discussion 2022

/0 Comments/in , /by

The Property Practitioners Act No22 of 2019 is the law from 1st February 2022.   Whenever there is a change in legislation, clarification is needed.

Listen to this 40-minute discussion to understand how agents must comply during the change from the old to the new Acts and how the new Act affects developers, Homeowner Associations and Property Practitioners.

REIS PPA Roundtable

The experts include Janet Alexander, CEO PropAcademy / Mfundo Daki, HOD Education Property Practitioners Regulatory Authority PPRA / and Sean Theunnissen, CEO Property Point.

How to Start Your Own Estate Agency

/26 Comments/in /by

How to start my own estate agency

Wanting to open your own estate agency firm?

Follow these steps to ensure that you are compliant with regulations:

  1. Principal Property Practitioner

Every estate agency firm must have a principal.  A principal property practitioner is an estate agent who has completed his 12-month internship, his NQF4, his PDE4, his NQF5.  He then has 2 years to complete his PDE5 exam whilst trading as a principal estate agent.  His fidelity fund certificate (FFC) clearly states “Principal Estate Agent”.

If you are a newcomer to the industry and believe that you will be found exempt from your NQF4 and NQF5 qualifications, you will still be obliged to complete your 12-month internship and write both your PDE4 and PDE5 exams.

If you need to know more about the Estate Agents Affairs Board (EAAB) education regulations, please read our free easy-to-follow download.

The principal property practitioner is solely liable for any misrepresentation or non-compliance of the firm and of all agents employed by the firm.

  1. Estate Agency Entity

You will need a vehicle within which to run your business and this can be done in the form of a Sole Proprietorship or a Pty Ltd company.  If you have a shelf Close Corporate (cc) you could use that but cc’s are no longer allowed to be formed in South Africa.

We suggest that you discuss the requirements of your entity with your accountant to find the best option for your application.  If you are including business partners as shareholders, it would be best to open a company to house this.

You must let your accountant know that the name of the business must be approved by the EAAB prior to reserving it with CIPC.  To reserve your name with the Board click “reserve a new agency name” on their website.

  1. Bank Accounts

The EAAB regulates that you must open a Trust Account which must be correctly designated in accordance with The Estate Agents Affairs Act.  This means that the name of the bank account must reflect:  “Name of Business t/a Trading Name Trust Account in accordance with The Estate Agents Affairs Act 117 of 1976”.  If this is not reflected, you will incur a penalty and be sanctioned.  As we all know, Trust Accounts must balance to the cent daily, and are used to house the public’s money which consists of deposits on sales/rentals and any other money the estate agency may want to hold pending a lease or sale being concluded.  Most estate agency firms include a clause in their contracts stating that the monies will be held in the attorney’s trust account.

When a client pays monies into the estate agency current account, the monies being held on behalf of the client must be immediately transferred to a trust account, failing which the estate agency will be sanctioned.

You must also open a current account and may also want to hold a credit card.

  1. EAAB Registration Compliance

All property practitioners employed by your firm, all directors, principal agent and the firm itself must register with the Board, obtain FFC’s and comply.  Trading may not occur without FFC’s being issued and displayed in the registered office of the business. Any person in the agency who is liaising with buyers/sellers/tenants/landlords and discussing property/finance matters must hold a valid current FFC.

If the firm is not compliant in any manner, then all the agents are not compliant and all FFC’s will be disqualified.  If an agent in the firm is not compliant then the firm is not compliant.

To register the following applies:

  • Firm: Application form, proof of payment of registration fee, CIPC documents, directors information, letter from bank stating that the Trust Account is open and correctly designated
  • Estate Agents: Must all be registered and comply. Required application form, proof of payment of registration fee, ID, letter of employment at firm signed by Principal.
  • Directors: Must all be registered as estate agents and comply with the Boards requirements;
  • Shareholders: Do not have to register as an estate agent.
  • Non-Executive Directors: Must register as estate agents but do not have to comply with the Boards education requirements. These directors are not involved with the firms Trust Account, Estate Agents or the Public.  They could be investors in the business or involved in aspects of the business other than property, ie HR.

Registration requirements may change, and it is best to find these requirements on the Boards website.

Audits

The EAAB inspector randomly audits estate agencies to check their compliance in the following:
Financial: Audit of trust account to be submitted 4 months from date of year end
Interest on deposits: in Trust account to be allocated according to regulation
Contracts of sale and lease: to be contained on file with all FICA requirements and FICA reporting system
Agents: Education compliance
The following must be displayed in your registered office:  EAAB Code of Conduct, Property Practitioners Act, Fica Reporting Officer, FFC’s of all agents and directors and firm

PropAcademy sell an easy to follow course, Pre Audit Evaluations which detailing all EAAB compliance requirements.

Policies and Procedures

It is advised that all estate agencies hold a Company Policy Document covering all aspects of their agency.

Contracts

It is advisable that you obtain the contracts that you need to run your business from a property attorney.

How to Own Your Own Real Estate Agency in South Africa

/49 Comments/in , /by

So you’re a high-achieving real estate agent. You work hard for your commission and you’re tired of paying over a large amount of your earnings to the estate agency firm you work for every time you make a sale.

How to Own Your Own Real Estate Agency in South Africa

You want to be your own boss, own your own estate agency firm, and retain your commission for yourself. And possibly, one day, you may even have estate agents working for you and paying over some of their commission to you!

That’s a great ambition to have. Real estate is an exciting profession, but even more so when you are in control of your own agency.

But before you rush off to sign a lease on your new premises, there are a few steps you have to take. The first, and most important of these, is to become a Principal Estate Agent.

The Estate Agents Affairs Board (EAAB) requires that the owner of every estate agency must be a qualified Principal Estate Agency – or Principal Property Practitioner. This means that you must have had some experience in running an estate agency firm and you will have qualified in terms of regulations set by the EAAB and by Services SETA (SSETA).

Let’s start at the beginning and track the route every prospective real estate agent must take en route to owning his or her own estate agency firm.

The first step – for every new entrant to the profession regardless of their background or previous qualifications – is to join an estate agency firm, obtain a fidelity fund certificate (FFC), and complete a 12-month internship. During this 12-month period, the intern estate agent collects information and completes a portfolio of evidence (PoE) which must be lodged with the EAAB.  You can enrol in our online Intern PoE logbook course directly on our website right away.

If you have already been in the industry for a few years, you will also have to produce a PoE for the Board, clearly showing evidence of at least a year in the field before you can become a full status estate agent.

The EAAB requires all intern agents complete their studies to become full status estate agents within two years from the time they are issued with their Fidelity Fund Certificate from the Board.

To become a full status estate agent, you must complete the Further Education Training: National Qualification Forum Level 4 Real Estate (NQF4) qualification, and then write your EAAB Professional Designated Exam level 4 (PDE4). All of these courses are available on our website and can be completed from the comfort of your home or office via an internet enabled mobile or computer device.

At PropAcademy, we strongly recommend that you start your NQF4 once you have been in the business for three months – while you are still completing your intern logbook PoE.

That’s because your NQF4 will take six-and-a-half months to complete. Then, once it’s submitted to SSETA (PropAcademy can assist you with this), it will take approximately one year before you are issued with a competency certificate.

Only once you have this can you can register with the EAAB to write your PDE4 to have your status changed from intern agent to full status agent – and you’ll be entitled to use the letters PPRE (Property Practitioner Real Estate) in your advertising material.

What if you have a degree or qualification which includes you having passed subjects that are directly related to the real estate industry? The EAAB makes provision for Recognition of Prior Learning (RPL) so it’s possible that you may be exempt from writing the NQF4 qualification.  An exemption matrix is available on the EAAB website.

Recognition of Prior Learning also relates to estate agents who have been estate agents since 2008 with no break in service and wrote the old Estate Agents Exam during that period.

So now you’ve completed your NQF4 (or obtained exemption) and your PDF4 qualification. You’re a full status estate agent. Your next step is to go on and achieve Principal Estate Agent status.

The EAAB requires you to have at least two years’ hands-on management of running a business, or to have been involved in the running of your employer’s estate agency firm. In addition, you will have to obtain an NQF5 qualification and pass your PDE5 exam.

Your NQF5 can be completed in six months but your work will then have to go through the normal SSETA channels before you can be issued with a certificate of competency.

Once that is done and you have your certificate, you will have to register with the EAAB to write your PDE5 and voilà, you will now be a Principal Estate Agents (soon to be known as a Principal Property Practitioner).

And NOW you can register and run your own estate agency business.

There are many regulations that must be adhered to in running your own estate agency. These are set out in the Estate Agents Affairs Act as well as the Code of Conduct and Ethics. PropAcademy can help to guide you through the requirements to ensure that when you are audited by the Board you are not penalised for any irregularities.

If you have any questions or would like further assistance with the process of becoming a real estate agency owner, or you’d like to know more about the real estate courses we offer, please feel free to contact us, and we’ll gladly assist you.

Written by Janet Alexander, CEO, PropAcademy